Correlation Between APA and Beijing Gas
Can any of the company-specific risk be diversified away by investing in both APA and Beijing Gas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining APA and Beijing Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APA Group and Beijing Gas Blue, you can compare the effects of market volatilities on APA and Beijing Gas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in APA with a short position of Beijing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of APA and Beijing Gas.
Diversification Opportunities for APA and Beijing Gas
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between APA and Beijing is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding APA Group and Beijing Gas Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Gas Blue and APA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on APA Group are associated (or correlated) with Beijing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Gas Blue has no effect on the direction of APA i.e., APA and Beijing Gas go up and down completely randomly.
Pair Corralation between APA and Beijing Gas
If you would invest 400.00 in APA Group on November 1, 2024 and sell it today you would earn a total of 20.00 from holding APA Group or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
APA Group vs. Beijing Gas Blue
Performance |
| Timeline |
| APA Group |
| Beijing Gas Blue |
APA and Beijing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APA and Beijing Gas
The main advantage of trading using opposite APA and Beijing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APA position performs unexpectedly, Beijing Gas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Beijing Gas will offset losses from the drop in Beijing Gas' long position.The idea behind APA Group and Beijing Gas Blue pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Beijing Gas vs. ENN Energy Holdings | Beijing Gas vs. EverGen Infrastructure Corp | Beijing Gas vs. OPAL Fuels | Beijing Gas vs. Atmos Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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